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Yahoo Seeking About $500,000 for New Tablet Ad Format

Yahoo's 'Livestand' Is Coming With a New Ad Unit and a Hefty Price Tag

Yahoo is releasing its Livestand tablet app on Wednesday and is asking advertisers to pay as much as $500,000 for packages centered around its new interactive, video ad unit, according to an agency executive who was pitched by Yahoo. The ad format, dubbed the "Living Ad," is the latest entry into the world of high-cost tablet ads, led by Apple's pricey iAd.

Yahoo's 'Living Ad'

The agency executive said that Yahoo was pitching potential launch partners on an ad package that would run through the end of the first quarter of 2012. This executive said he did not sign on because he first wanted to evaluate how Livestand was received, both by consumers and third-party publishers. Yahoo, which initially chose not to comment on pricing for the "Living Ads" product, has since contacted Ad Age to share that ad packages range between $200,000 and $500,000.

Livestand is the latest digital newsstand app in a crowded market already occupied by Flipboard, Zite, AOL's Editions, and Pulse. The question for Yahoo is whether it can differentiate its offering enough to convince news enthusiasts to download and interact with another news aggregation app or convert from existing ones.

Yahoo has been talking to advertisers about how it will build audience for the new app, including "migrating" users of other Yahoo mobile apps to Livestand, as well as using Yahoo's massive reach--177 million unique visitors a month in the U.S., according to comScore--to drive installs. Yahoo's most-established competitor, startup Flipboard, has been downloaded 3.5 million times as of September, according to CEO Mike McCue.

The Livestand app will feature a magazine-style layout and launch with some content from third-party publications, whose publishers will share ad revenue with Yahoo. These publishers will also be able to sell their own advertising on the platform. Diane McGarvey, director-ancillary products at Scientific American, which will offer some of its web content on the app at launch, said Yahoo will keep about 70 percent of the ad revenue on the ads it sells against Scientific American content.

The app is also expected to include original content from Yahoo sites. Users will have to log in to their Yahoo or Facebook accounts to receive personalized content or to share outside of the app.

Ms. McGarvey said Scientific American saw Livestand as an opportunity to reach its current readers in a tablet app form and expand its reach to a new audience, all while it develops its own standalone magazine app for tablets.

The project is one of several initiatives to make Yahoo a player in mobile advertising, one of the fastest-growing sectors of display advertising, expected to be worth $1 billion this year in the U.S. and $1.2 billion in 2012, according to eMarketer. As consumers migrate away from PCs and toward tablets and tablet-like devices and phones, Yahoo wants to be sure it can still show ads to those users.

Livestand's launch date was first reported by All Things D. The website also reported that Google would unveil its own offering, Propeller, as early as this week.